Key facts
- HPCL aims to start its Rajasthan petrochemical units in Q4 2026.
- A fire in April caused a delay from the original April startup date.
- The facility will produce 1 million tons/year of polyethylene and 1 million tons/year of polypropylene.
- Specialized PE and PP grades are expected to reduce India's import dependency.
- HPCL is targeting export markets in Europe and West Africa.
Indian state-owned refiner Hindustan Petroleum (HPCL) is on track to commence operations at its petrochemical units in Rajasthan during the fourth quarter of 2026. The project, located at the new Pachpadra refinery, experienced a delay from its initial April target due to a fire incident in April affecting heat exchangers. However, HPCL remains confident in bringing some capacity online by November or December.
Saugata Chaudhuri, head of petrochemicals at HPCL, stated that the fire was contained quickly, allowing for a revised inauguration timeline for the refinery. The focus will now shift to the timely startup of the petrochemical facilities. The complex will feature a 1 million tons per year polyethylene (PE) plant, with two swing production lines for linear-low density polyethylene (LLDPE) and high-density polyethylene (HDPE), each with a capacity of 500,000 tons per year. An integrated 1.2 million tons per year dual-feed cracker will supply ethylene to these plants. Additionally, the facility will produce 1 million tons per year of polypropylene (PP).
HPCL anticipates that the specialized grades of PE and PP produced will help substitute imports, particularly crucial given geopolitical uncertainties and supply disruptions. India's PE imports have recently seen a significant drop, reaching a four-year low in April 2026, partly attributed to the closure of the Strait of Hormuz and a substantial decline in exports from the UAE, India's primary PE supplier. PP raffia prices have fallen to $1,100-1,140/tcfr India, down from $1,350-1,430/tcfr India in April, while LLDPE prices are now assessed at $1,090-1,150/tcfr India, compared to $1,430-1,500/tcfr India earlier in the year.
Furthermore, HPCL sees potential export opportunities for its specialized products, particularly targeting European markets where Northeast Asian players are active, and West Africa, leveraging existing relationships. South Korea exported significantly more PP to the EU in 2025 than India, highlighting potential growth areas for Indian exports, especially as India and the EU are expected to finalize a free trade agreement by year-end.